On Monday, the TCW Group extended its ETF lineup with the launch of both the TCW Compounders ETF (GRW) and the TCW Artificial Intelligence ETF (AIFD).
Both GRW and AIFD have been converted from mutual funds into ETFs. Previously, these products were known as the TCW Artificial Intelligence Equity Fund (TGFTX) and the TCW New America Premier Equities Fund (TGUSX).
AIFD and GRW are both actively managed and have a net expense ratio of 0.75%. Each fund utilizes a mix of fundamental analysis, quantitative data, and thematic data to scrutinize potential investments.
“This signifies TCW’s continued growth trajectory in ETFs as we develop new and compelling investment solutions that meet the evolving needs of our clients,” TCW President and CEO Katie Koch noted. “As we continue to innovate, we remain focused on cross-sector, long-term mega-trends, such as AI, and their transformative impact. We will continue to pursue accessible, efficient products poised to capture ongoing and emerging opportunities in the market.”
Growth In Focus
GRW is benchmarked to the Russell 1000 Index. The fund’s goal is to provide exposure to companies with foreseeably consistent business models, providing long-term value and returns. Instead of prioritizing investment in current mega-cap companies, GRW aims to invest in companies positioned to benefit from growing trends.
The fund intends to focus investments in large-cap securities. However, the prospectus notes that companies of any size remain under consideration. GRW aims to keep the portfolio size at about 20-30 companies.
AI Benefits
AIFD aims to give investors capital growth in the long term through investing in securities tied to artificial intelligence. While the fund invests in companies developing and improving AI, the holdings also include companies utilizing artificial intelligence to provide better financial results.
The fund is benchmarked to the Russell 3000 Growth Index. In typical scenarios, AIFD maintains a portfolio of roughly 25 to 60 different companies with market caps of at least $300 million upon acquisition.
“Advisors have historically put a single-digit percentage of client assets into thematic ETF strategies. It’s great to see TCW expand their lineup with their own approach to artificial intelligence investing,“ noted Todd Rosenbluth, VettaFi Head of Research.
The TCW Group currently has 5 different ETFs listed in the United States. One of TCW’s largest funds, the TCW Transform 500 ETF (VOTE), has over $500 million in assets under management.
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